AB2: The Rebirth of Redevelopment?

By Bill Britt
For the Latino Policy Connection

imgresThe City of Palmdale was honored earlier this month as the Most Business Friendly City with a population greater than 65,000 in L.A. County. The City of El Segundo grabbed that title for a city population under 65,000. Both honors, the Eddy Awards, are from the Los Angeles County Economic Development Corporation (LAEDC), which has been handing out these awards for the last twenty years as a way to encourage business-friendly local government policies.

Now, there’s another path to recognition for cities looking to boost their business-friendly profile: Assembly Bill 2 (AB2), signed into law by Governor Brown recently.

“Absolutely,” says South Gate City Manager Mike Flad. “AB2 has the potential to help cities be more business friendly. As we compete with other states and countries we need all the tools we can get.”

imagesAfter Governor Brown dissolved California’s 400+ redevelopment agencies in 2011, and after years of adamantly refusing to bring them back, he signed legislation to do exactly that in the form of a new, but limited version of redevelopment.

Dan Carrigg, the Legislative Director for the League of California Cities who helped draft AB2, says the bill’s accountability factor is among the biggest changes. “In the old [system], you’d have a five member body of a city council sitting as a redevelopment agency. Under AB2, at least two of the individuals have to either live or work in the affected area.”

Also new: Provisions that allow voters to shut a redevelopment project down if they don’t like how it’s developing.
“There’s voter empowerment that’s part of this,” Carrigg explains. “If the community isn’t really onboard with what’s being proposed, there’s an opportunity for them to protest and if there’s a significant amount of protest it triggers an election. If the majority of those affected don’t want it, they’re not going to do it.”

3SA_5852Voters will also be able to stop the process after it starts. “Every ten years there’s an opportunity for those who are affected to have an election [to] evaluate how they feel things are going,” says Carigg. “They can shut off any new activity from going forward. We’re hoping those changes will result in developments and projects that are more in sync with what the communities actually want.”

If a community actually wants to take advantage of AB2, South Gate City Manager Mike Flad suggests council members take a hard look at whether it wants to use one of AB2’s more contentious provisions: imminent domain, the seizure of private property for public use.
“The council should have a discussion, sooner rather than later, on whether they’re interested in engaging powers like imminent domain because a lot of political bodies have no interest in exercising that right.”

images-3If the prospect of engaging a controversial strategy like imminent domain is too much for city officials, they might want to consider another tool provided by AB2: the formation of an Enhanced Infrastructure Financing District (EIFD). It’s a similar tool with different benefits.
“They don’t come with the power of imminent domain,” Flad explains. “They also don’t require housing set-asides. A very technical bureaucratic analysis needs to take place before council says we’re going to create one of these zones.”

Reaction by the local Latino policymakers we contacted to AB2 is mixed. Westminster city council member Sergio Contreras points out AB2’s shortcomings. “While it is a good start, it doesn’t go far enough in providing cities with the tools they need to effectively address blighted and disadvantaged neighborhoods. I would like to see a more concentrated effort that can fill in some of the holes left by AB2.”

In the City of Moreno Valley, Dr. Yxstian Gutierrez is one of many city council members across the state who are disappointed with AB2.
“The loss of Redevelopment devastated cities that relied upon its provisions to enhance community livability, promote jobs and spur economic development.”

images-1Even so, the dissenters are optimistic. “I would have liked to see AB2 be more comprehensive,” says Riverside city council member Andy Melendrez, “but given the political climate I think it was the best we could have asked for.”
Dr. Gutierrez agrees. “While AB2 offers fewer benefits than available through [the previous Community Redevelopment Agencies (CRAs)], I believe that it will provide another tool to help cities address aging infrastructure and promote affordable housing.”

While several city council members say their communities are still weighing the pros and cons of AB2 (“We’ll proactively consider opportunities on a case-by-case basis,” says Gutierrez) Melendrez says Riverside plans to take advantage of it. “When past redevelopment funds were issued and allocated appropriately, we were able to significantly enhance many of our low income communities.”

imagesIn the years leading up to the limited renewal of redevelopment agencies, many cities were already touting business-friendly policies.
“In Moreno Valley,” Gutierrez says, “we work at the speed of business! Proof of our success lies in the results: More than 4,000 new jobs since 2013 and major new projects” involving Amazon and Proctor & Gamble to name a few, and, “the largest single industrial development project in California’s history – the World Logistics Center, a world class business park.”

Contreras from suggests taking a drive around Westminster “to see some of our recent successes. We are weeks away from opening a brand new Costco Business Center. We have three large-scale housing developments under construction. We have attached, relocated, or seen the complete remodeling of three automotive dealerships in the last two years. The private sector doesn’t invest that type of money in a city if it isn’t business-friendly.”

Even the City of Chino Hills, where an above-average population growth includes many residents with an above-average income, maintains an all-out effort to build on a reputation of being business-friendly. “We actually have a consultant that reaches out to the business community,” says City Council Member Ray Marquez. “We conduct surveys via our great Chamber of Commerce, so when we get feedback, positive or negative, they share that with the city but they also share that with me. If it’s a derogatory comment I try to rectify it.”

Riverside’s Melendrez and other city council members from this region are just as determined to take their business-friendly efforts up more than a few notches, with or without the help of AB2. “We are consistently looking to solicit feedback from our businesses that will enhance our services as a city and [we are] always looking to assist and promote the local business community,” he says.

Even El Segundo, with its newly awarded Most Business Friendly City award, is taking steps to keep its title by maintaining a very long To Do list, according to Mayor Suzanne Fuentes. “We have discussed restructuring the business license tax, increasing outreach and communication with the business community, planning a business appreciation and recognition event, improving IT architecture and hiring additional employees in Planning and Building Safety.”
a0967e_a7e457c44cfe22475e51b0c3dddd52e0.jpg_srz_582_416_85_22_0.50_1.20_0It sounds like a full plate for any city, but as Fuentes claims, “El Segundo IS the city where big ideas take off!”